- Solar power in India is a fast developing industry.. India has the lowest capital cost per MW globally of installing solar power plants.
- The Indian government had an initial target of 20 GW capacity for 2022, which was achieved four years ahead of schedule.
- Rooftop solar power accounts for 2.1 GW, of which 70% is industrial or commercial. In addition to its large-scale grid-connected solar photovoltaic (PV) initiative, India is developing off-grid solar power for local energy needs.
- Solar products have increasingly helped to meet rural needs; by the end of 2015 just under one million solar lanterns were sold in the country, reducing the need for kerosene.
- The International Solar Alliance (ISA), proposed by India as a founder member, is headquartered in India. India has also put forward the concept of “One Sun One World one Grid” to harness abundant solar power on global scale
For India: Installing of solar powerachievable target
- The government would recognise, the idea of building a domestic solar manufacturing industry that delivers increasing volumes of quality photovoltaic cells, modules and associated equipment is long in the tooth.
- Combined with low domestic cell manufacturing capacity at 3.1 GW last year, and heavy reliance on China, high ambition must now be supported by aggressive official policy.
- The Chinese story is one of a steady rise from insignificant manufacturing capability in the 1990s, to virtual dominance through active government support in identifying and acquiring top technologies globally, importing critical raw materials such as polysilicon, acquiring solar manufacturers abroad, and investing in third countries with ready capability.
- Importantly, the domestic market was treated with great importance while promoting exports.
India is not a leader in Solar panel Manufacturer:
- Just as India has had no overall industrial policy since economic reforms began, there is no real plan in place to ensure solar panel manufacture.
- India should have taken a lead in solar panel manufacture to generate solar energy long ago. The share of all manufacturing in GDP was 16% in 1991.
- Despite the new policy focus on solar plant installation, India is still not a solar panel manufacturer.
- The solar power potential offers a manufacturing opportunity. The government is a near monopsonistic buyer.
Government Initiatives:
- Wider adoption of roof-top solar power generation.
- The Ministry of New and Renewable Energy (MNRE), which provides 30 per cent subsidy to most solar powered items such as solar lamps and solar heating systems, has further extended its subsidy scheme to solar-powered cold storages.
- The Ministry of Shipping plans to install solar based power systems at all the major ports across the country by 2017.
- The Government of India is taking a number of steps and initiatives like 10-year tax exemption for solar energy projects.
- The National Solar Mission aims to promote the development and use of solar energy for power generation.
- Renewable Energy Certificates (RECs) that provide an incentive to those who generate green power by providing financial incentives for every unit of power they generate.
Lessons from China:
- Core competence
- The six largest Chinese manufacturers had core technical competence in manufacturing solar cells.
- When the solar industry in China began to grow, Chinese companies already possessed the know-how.
- Indian companies had no learning background in semiconductors when the solar industry in India began to grow from 2011.
- Government policy
- Chinese government has subsidised land acquisition, raw material, labour and export.
- Commitment by the government to procure over the long run.
- Cost of capital
- The cost of debt in India (11%) is highest in the Asia-Pacific region, while in China it is about 5%.
Challenges:
- Lack of easy and cheap funding, and increasing cheap imports from China and Taiwan is hurting the domestic industry.
- The fundamental re-structuring of the country’s power and energy infrastructure will be its biggest challenge.
- Cost associated with solar power generation is more when compared to coal.
- Transmission & Distribution losses that at approximately 40 percent make generation through solar energy sources highly unfeasible.
- Per capita land availability is very low in India, and land is a scarce resource.
- Competition from Ultra Super Critical Coal Power Generation Plants which are cheaper, lesser emissions and higher efficiency.
Way Forward:
- The key requirements are integrated policies fully supported by States. Industry must get help to set up facilities and avail low cost financing both important elements in China’s rise and be able to invest in intellectual property.
- However, in terms of manufacturing of solar equipment, it is dominated by a handful number of countries. India, in order to become a world leader in solar power, cannot just rely on large scale solar deployment by importing solar equipment.
- Flexible financing options for individuals to install rooftop solar installations would also support a faster adoption of clean energy.
- Focus on last mile connectivity in remote areas where developing transmission infrastructure is a challenge through small solar installations or solar community grids by using a domestically manufactured product with small power inverters or batteries in every home may be helpful to ensure power for all in countries like India.
- Rapid progress requires a strategic shift to aid competitive domestic manufacturing
